WLI

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle and Colorado through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand with too few transactions to trend.

For the week, despite hopes for gains, prices through Friday afternoon were generally unevenly steady.

Southern Plains: steady at $112/cwt.

Nebraska: steady to $1 lower on a live basis at $110-$111; steady to $1 higher in the beef at $176.

Colorado: Steady to $1 higher on a live basis at $112.

Western Corn Belt: steady to $2 lower on a live basis at $110; steady to $1 higher in the beef at $175-$177.

Through Thursday, the average five-area direct fed steer price was 1¢ higher on a live basis at $111.49/cwt. The average steer price in the beef was 47¢ higher at $176.02.

Cattle futures closed lower Friday. Pressure included demand uncertainty and continued grain market strength.

Live Cattle futures closed an average of 17¢ lower, except for 5¢ higher in Oct.

Feeder Cattle futures closed an average of 52¢ lower.

Choice boxed beef cutout value was 99¢ higher Friday afternoon at $206.80/cwt. Select was 10¢ higher at $196.69.

Corn futures closed 1¢ to 2¢ higher through the front four contracts and then mostly 1¢ lower.

Soybean futures closed 11¢ to 19¢ higher through Sep ‘21 and then mostly 4¢ to 8¢ higher.

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Major U.S. financial indices edged higher Friday, despite a disappointing national employment report.

Total nonfarm payroll employment declined by 140,000 month to month in December, according to the U.S. Bureau of Labor Statistics. The trade expected a slight gain. Average hourly earnings for all employees on private nonfarm payrolls increased 23¢ to $29.81.

The Dow Jones Industrial Average closed 56 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 134 points.

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Although U.S. beef exports for January through November remained lower year over year, they stormed back in November, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

November beef exports totaled 115,337 metric tons (mt), up 6% from a year earlier and the most since July 2019. Export value climbed 8% year-over-year to $707.5 million. November beef muscle cut exports were the third largest on record at 91,338 mt (up 13%, trailing only July and August 2019), valued at $630.4 million (up 11%).

“Demand for U.S. beef in the global retail sector has been outstanding and we expect this to continue in 2021,” says USMEF President and CEO Dan Halstrom. “Unfortunately, foodservice continues to face COVID-related challenges. We expect a broader foodservice recovery this year, especially from mid-2021, but will likely still see interruptions in some markets.”

Among highlights for the month, November exports to China and Guatemala set new monthly records, while shipments to Mexico were the largest since 2016.

Through November, beef exports were 6% lower year-over-year in volume (1.13 million mt) and down 7% in value ($6.9 billion). January-November muscle cut exports were 3% below 2019 in volume (883,012 mt) and 6% lower in value ($6.11 billion).

As for pork, November export volume was steady year over year at 258,801 mt, with value down 2% to $697.5 million. Although China/Hong Kong remained the largest destination for U.S. pork in November, momentum continued to build in other markets including Japan, Mexico and Central America.

January-November pork exports set new annual records for both volume (2.72 million mt, up 14% from the previous year’s pace) and value ($7.03 billion, up 13%). Pork muscle cut exports also shattered previous annual records, increasing 18% year-over-year to 2.29 million mt, valued at $6.08 billion (up 15%).

Negotiated cash fed cattle trade was limited on light demand in Kansas, the Northern Plains and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few dressed trades in Nebraska at $177/cwt., which was $1-$2 higher than last week, when live prices were $112 in the Southern Plains and $110-$112 up north.

Firmer Cattle futures and higher outside markets are helping foster optimism for higher cash prices.

The five-area weighted average steer price in December was $109.05/cwt., on a live basis (FOB), which was 20¢ higher than the previous month but $10.95 less than the previous year, according to USDA. The average steer price in the beef (delivered) was $170.94, which was 60¢ higher than the previous month but $20.24 less than the prior year.

Cattle futures closed mostly higher Thursday. Support included the likely need for packers to get cattle bought, in order to maintain the brisk processing pace. Feeder Cattle also benefitted from a pause in escalating Corn futures.

Live Cattle futures closed an average of 26¢ higher, except for 2¢ lower and 25¢ lower on either end of the board.

Feeder Cattle futures closed an average of $1.11 higher.

Choice boxed beef cutout value was 54¢ higher Thursday afternoon at $205.81/cwt. Select was 51¢ higher at $196.59.

The average dressed steer weight the week ending Dec. 25 was 913 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 8 lbs. less than the previous week but 8 lbs. heavier than the same week a year earlier. The average dressed heifer weight of 839 lbs. was 8 lbs. less than the previous week but 2 lbs. heavier than the prior year.

Corn futures closed unchanged to 1¢ lower.

Soybean futures closed 3¢ to 6¢ lower through Sep ‘21 and then mostly 1¢ to 2¢ higher.

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Major U.S. financial indices surged higher Thursday, buoyed in part by clarity surrounding the presidential election and fewer initial unemployment insurance claims than the trade expected.

For the week ending Jan. 2, initial unemployment insurance claims of 787,000 were 3,000 few than the previous week, according to the U.S, Department of Labor. The four-week moving average was 818,750, which was 18,750 fewer than the previous week’s revised average.

The Dow Jones Industrial Average closed 211 points higher. The S&P 500 closed 55 points higher. The NASDAQ up 326 points.

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Digital recipes play a pivotal role in the path to purchase for grocery and consumer packaged goods (CPG), a pathway the Beef Checkoff is using to accelerate ecommerce growth of beef products.

First, some context.

Last summer, Chicory, the leading contextual commerce provider for CPG and grocery brands, released results from the first annual digital recipe usage survey, quantifying the role of digital recipes in the path to purchase. It demonstrated that recipes represent the number one reason a shopper purchases a new product, proving that recipes are a top strategy for getting new and lapsed shoppers to consider trying a brand that they haven’t recently considered.

“This survey confirmed that digital recipes play a pivotal role in the path to purchase for grocery and CPG products,” said Yuni Sameshima, Chicory’s CEO and co-Founder. “This validates the idea that recipes drive consumer behavior. Consumers use recipes to plan ahead for shopping trips, reference recipes in store and re-reference recipes after the shop as they cook. So, a contextual commerce strategy for grocery and CPG brands should integrate commerce-enabled ads within recipes to directly connect recipe and food inspiration to retailers’ sites for purchase.”

More specifically, according to the Chicory survey:

• 81% of respondents confirmed that they use digital recipes.
• Recipes are 19% more likely to inspire a shopper to try a new product than a recommendation of a family member or friend; 61% more likely than the item being featured or on sale at the retailer, and 78% more likely than an influencer recommendation.
• 82% of Americans responded that they reference digital recipes on their mobile devices while they are physically in the store.
• Baby boomers (18%) were least likely to use recipes. Millennials/Gen Z (48%) and Gen X (34%) were most likely to use recipes.

With all of that in mind, Chicory and the National Cattlemen’s Beef Association (NCBA) announced this week a partnership to raise the profile of beef to American consumers and accelerate ecommerce growth of beef products at Kroger and Kroger banners, Walmart Grocery and Albertson/Safeway banners.

NCBA is a contractor to the Beef Checkoff program and manager of the brand: Beef. It’s What’s for Dinner (BIWD). The Beef Checkoff is leveraging Chicory’s Digital Shopping Aisle experience for two media campaigns, as well as shoppable recipes on BeefItsWhatsforDinner.com.

“At a time when more people are shopping online than ever before, this partnership has allowed us to jump into the world of ecommerce and encourage consumers to enjoy delicious beef for dinner,” says Bridget Wasser, NCBA Senior Executive Director of Product Quality. “Beyond the media campaigns, the shoppable recipes take the work out of dinner from beefy meal ideas, to shopping and grocery delivery with the click of the mouse.”

Chicory’s first-to-market Digital Shopping Aisle solution enables commodity-focused groups to equitably represent beef manufacturers, while executing an effective shopper marketing and contextual commerce campaign. BIWD is utilizing Chicory Premium in recipe ad units to ‘own’ ingredients via in-line units and ‘pairings’ ads to feature products within related content in order to promote beef products in contextually relevant recipes on over 1,500 recipe sites, including Taste of Home, Creme de la Crumb and Fork in the Kitchen.

Consumers see ads that are shoppable at either Kroger and Kroger banners, Walmart Grocery or Albertson/Safeway banners based on retailer geography. Consumers who click on the Walmart Grocery or Albertson/Safeway banners shoppable ads are driven to Chicory’s unique Digital Shopping Aisle, showcasing the available beef products needed for the recipe, such as ground beef, steak and roasts, at a retailer. The Digital Shopping Aisle randomizes the available products that the consumer sees, ensuring a truly equitable experience for each brand and product. Here, shoppers may choose their preferred brand and add the product to their digital shopping cart for a seamless checkout experience. Consumers who click on the Kroger or Kroger banners shoppable ads are driven to customized Kroger landing pages with the various available cuts of beef to make their choice.

The partnership also provides a seamless way for BeefItsWhatsForDinner.com to lead users from inspiration to purchase through Recipe Activation, a commerce-enabled recipe checkout experience. Using Chicory’s shoppable recipe technology, users can purchase instantly all ingredients needed for any of the recipes on BeefItsWhatsForDinner.com.

Negotiated cash fed cattle trade was at a standstill in the Northern Plains through Wednesday afternoon. Elsewhere, it was mostly inactive on very light demand, according to the Agricultural Marketing Service.

Cattle feeders offered 1,142 head (mostly from the Southern Plains) in Central Stockyards weekly Fed Cattle Exchange auction on Wednesday. One lot of Southern Plains heifers (42 head) sold for a weighted average price of $112/cwt., via Bid-The-Grid™, which was steady with last week’s country trade in the region.

Likewise, fed steers and heifers traded mostly steady at Sioux Falls Regional’s fat auction. There were 301 head of Choice 3-4 steers weighing an average of 1,559 lbs., bringing an average price of $110.76. Country trade in the region last week was at $110-$112.

Cattle futures closed mixed Wednesday, with Live Cattle firming, while Feeder Cattle were pressured by higher grain prices.

Live Cattle futures closed an average of 40¢ higher, except for 5¢ lower and 60¢ lower on either end of the board.

Feeder Cattle futures closed an average of 68¢ lower.

Choice boxed beef cutout value was 63¢ lower Wednesday afternoon at $205.27/cwt. Select was 41¢ lower at $196.08.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 11¢ to 14¢ higher.

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Except for tech stocks, major U.S. financial indices closed higher Wednesday with investors apparently expecting more economic stimulus and government spending under a Biden administration.

As for known reality, private sector employment decreased by 123,000 jobs from November to December according to the December ADP National Employment Report^®. The trade was expecting a month-to-month gain.

The Dow Jones Industrial Average closed 437 points higher. The S&P 500 closed 21 points higher. The NASDAQ was down 78 points.

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Typical beef export seasonality, further potential pandemic disruptions and plentiful fed cattle supplies could test domestic consumer beef demand in the first quarter.

In the latest issue of In the Cattle Markets, Elliott Dennis, livestock economist at the University of Nebraska-Lincoln explains, historically, first-quarter beef export quantities are seasonally lower and more inconsistent than in other quarters; they’re highest and most consistent in the second quarter.

“Local, domestic, and international changes in slaughter rates, supplies of substitute meat products, and consumer beef preferences all influence the domestic wholesale beef price and eventually each country’s desire to import U.S. beef,” Dennis explains.

Production and demand disruptions wrought by the pandemic weighed on U.S. beef exports for much of last year but appeared to be regaining momentum in the fourth quarter.

Through October, U.S. beef exports were 7% less in volume (1.02 million metric tons), compared to the same period a year earlier, according to data released by USDA and compiled by the U.S. Meat Export Federation. Value of January-October beef exports was 8% less than the prior year at $6.2 billion.

“The domestic market likely needs to be the driver of working through wholesale meat supplies in the first quarter,” Dennis says. “Drawing from 2020, the market’s ability to do so could be hindered by meatpacking plant shutdowns (recent example in Guelph, Canada) and government restrictions on social gatherings (increased restrictions in New York State). A positive is that the U.S.-Japan, U.S.-Korea, U.S.-China, and USMCA trade deals are still in place for the time being. Whether we enter round 2 of the U.S.-China trade deal and whether China imports already-committed U.S. beef is more uncertain, given the anticipated change in the presidency.”

Negotiated cash fed cattle trade was mostly inactive on very light demand in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was at a standstill.

Prices on a live basis last week were at $112/cwt. in the Southern Plains, at $111-$112 in Colorado and at $110-$112 in Nebraska and the western Corn Belt. Dressed prices were at $175-$176.

Cattle futures rebounded Tuesday, with Live Cattle gaining back most of what was lost in the previous session, while Feeder Cattle regained about half, on an average basis. That was despite another surge in grain futures prices.

Live Cattle futures closed an average of $1.62 higher, except for $1.40 lower in the back contract.

Feeder Cattle futures closed an average of $1.35 higher, from 75¢ to $2.02 higher.

Choice boxed beef cutout value was $3.97 lower Tuesday afternoon at $205.90/cwt. Select was 4¢ lower at $196.49.

Corn futures closed 8¢ higher through the front three contracts and then mostly 3¢ higher.

Soybean futures closed 26¢ to 33¢ higher through the front six contracts and then mostly 18¢-21¢ higher.

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Major U.S. financial indices closed higher Tuesday amid positive economic news.

Support included the latest Manufacturing ISM^®Report On Business^®from the Institute for Supply Management (ISM) indicating the Purchasing Managers Index (PMI^®) increased 3.2% month to month in December to 60.7%.

“This figure indicates expansion in the overall economy for the eighth month in a row after contracting in March, April, and May, which ended a period of 131 consecutive months of growth,” says ISM Chair Timothy R. Fiore. He adds, “Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that are limiting manufacturing growth potential.”

As well, West Texas Intermediate Crude Oil futures (CME) surged on the day with a surprise announcement that Saudi Arabia is cutting production by 1 million barrels per day in February and March.

The Dow Jones Industrial Average closed 167 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 120 points.

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Agricultural producer sentiment rose with income prospects in December, according to the latest Purdue University/CME Group Ag Economy Barometer.

The barometer increased 7 points from November to a reading of 174. Both of the barometer’s sub-indices, the Index of Current Conditions and the Index of Future Expectations, were also higher month to month. The Index of Current Conditions climbed 15 points to 202 and the Index of Future Expectations increased by 5 points to a reading of 161.

“The rise in the Ag Economy Barometer was primarily driven by farmers’ perception that the current situation on their farms really improved. The sharp rise in the Index of Current Conditions is correlated with the farm income boost provided by the ongoing rally in crop prices. That appears to be the driving force behind producers’ optimism,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In December, the percentage of ranchers and farmers expecting farmland values to rise over the next year increased 9 points from November to a reading of 35. The percentage expecting farmland values to rise over the next five years increased 11 points from November to a life-of-survey high 65%.

Likewise, more producers said they expect farmland cash rental rates to rise in 2021 when compared to survey results from late summer. In December, 18% of respondents said they expect cash rental rates to rise in 2021, double the percentage who felt that way in August and September. Moreover, it’s clear that any downward pressure on cash rental rates evident earlier in the year has nearly disappeared, as just 5% of farmers said they expect to see cash rental rates decline in 2021 compared to 17% who felt that way in August.

Agricultural producers were less optimistic when asked about the on-going trade dispute between the U.S. and China. In the first quarter of 2020, an average of 76% of respondents thought the trade dispute’s ultimate resolution would favor U.S. agriculture. By spring, that average declined to 62%, and by December it dropped to an all-time survey low of 47%. When asked whether they expect U.S. agricultural exports to increase over the next five years, only 51% of respondents in December said they expect to see export growth.

To learn more about what factors might be motivating the shift in producers’ sentiment before and after the November election, the surveys for November-December included a series of questions focused on producers’ future expectations for environmental regulations, taxes and other key aspects of the agricultural economy.

In December, more than 80% of ranchers and farmers said they expect environmental regulations to become more restrictive, compared to 41% who felt that way in October. More than 70% of producers expect to see higher income and estate taxes compared to 35% and 40%, respectively, in October and November.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from Dec. 7-11, 2020.